Rodrigo Patuzzo, chief executive officer of Brazil’s Grupo Nos which operates Oxxo convenience stores and Shell Select, is seeing a notable trend among shoppers: despite inflation pressure, many are choosing ease over price.
Grupo Nos, a venture between Brazilian energy firm Raizen and Oxxo’s Mexican retailer parent Femsa, is pushing to take a larger chunk of the local small store market, with a focus on Sao Paulo, targeting busy urban consumers.
“There is a trend of people looking to save time, people who want to avoid long lines or going miles to the supermarket,” Patuzzo told Reuters in a video interview. Oxxo, which started in Brazil in 2020, now has 119 company-owned and operated stores and aims to have 309 stores by April next year, he said.
Luiz Claudio Dias de Melo, at consultancy 360 Varejo, said the convenience store model had benefited from the coronavirus pandemic and remote working, where people stayed closer to home, helping local or small stores beat out busy supermarkets.
Joao Gabriel Batista, a 30-year-old advertising worker, was won over by the time factor, despite it costing a bit more.
“It’s better to go to a fast market than to save a couple of reais (a few cents) standing in line at a big market,” he said.
Oxxo competes in Brazil with Grupo Pao de Acucar’s Minuto Extra and Minuto Pao de Acucar, Grupo Carrefour Brasil and Hirota, another local brand. In a break from its Mexican model, Oxxo has added bakery along with fruit and vegetables.
Patuzzo admitted issues such as high inflation – running annually at 12% – raised logistics costs for the firm, but said it was trying to mitigate this with third-party delivery and smaller stores saving on rent and bills.
“We want to reach an efficiency level that could be used in the whole country,” Patuzzo said.
Brazilian wholesale bank Itau BBA said in a report in April that Brazil could be the next big market for Oxxo outside its home market in Mexico. The convenience format only has a 1% market share in Brazil leaving lots of room to expand.
Source: El Financiero